General Studies · Principles of Lending
Why do commercial bankers generally prefer secured loans over unsecured loans?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1They provide a cushion or fallback option for loan recovery via collaterals in case the borrower defaults✓
- 2They are inherently cheaper in terms of upfront administrative processing costs for the borrower
- 3They require minimal compliance and legal documentation
- 4Secured loans take significantly less time to process and disburse
Correct answer
They provide a cushion or fallback option for loan recovery via collaterals in case the borrower defaults
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